EXHIBIT A
AIRPLANES PASS THROUGH TRUST
I. Transaction Overview
MORGAN STANLEY DEAN WITTER LEHMAN BROTHERS
Offered Certificates (assuming an amortizing structure)*
Subclass A-9 Certificates
-------------------------
Aggregate Initial Principal Amount $750,000,000
Expected Ratings
Fitch AA
Moody's Aa2
Standard & Poor's AA
Interest Rate LIBOR + o%
Initial Loan to Value (1) 57.7%
Initial Loan to Assumed First Year's Net Revenue (2) 4.71x
Assumed Interest Coverage Ratio (3) 3.64x
Assumed Debt Service Coverage Ratio (4) 3.64x
Assumed Adjusted Debt Service Coverage Ratio (5) 1.60x
Expected Final Payment Date (6) November 15, 2008
Expected Weighted Average Life (Years) 5.1
Expected Principal Amortization Period January 15, 2004
to November 15, 2008
Final Maturity Date March 15, 2019
- --------------------------------------------------------------------------------
* The ratios in this table are calculated as of March 15, 2001 and in each
case exclude $40 million of class A Principal Adjustment Amount which will
be paid out of the miscellaneous reserve amount on April 17, 2001
(1) "Initial Loan to Value" represents (i) the aggregate principal amount of
the class A certificates divided by (ii) the aggregate appraised value of
the aircraft as of January 31, 2001, plus $80 million, the expected amount
of the liquidity reserve amount, net of security deposits, on the closing
date.
(2) "Assumed First Year's Net Revenue" means gross revenue less leasing costs,
servicer fees, administrative agent fees, cash manager fees and other
general and administrative costs
(3) "Assumed Interest Coverage Ratio" means Assumed First Year's Net Revenue
divided by Assumed First Year's Interest. "Assumed First Year's Interest"
means the interest payable on the subclass A-9 certificates and each other
subclass of class A certificates then outstanding
(4) "Assumed Debt Service Coverage Ratio" means Assumed First Year's Net
Revenue divided by Assumed First Year's Interest and Minimum Principal.
"Assumed First Year's Interest and Minimum Principal" means (a) the
interest and minimum principal payments on the subclass A-9 certificates
plus (b) the interest and minimum principal payments assumed to be payable
on each other subclass of class A certificates currently outstanding
(5) "Assumed Adjusted Debt Service Coverage Ratio" means Assumed First Year's
Net Revenue divided by Assumed First Year's Interest, Minimum Principal and
Class A Principal Adjustment Amount. "Assumed First Year's Interest,
Minimum Principal and Class A Principal Adjustment Amount" means (a) the
interest, minimum principal payments and principal adjustment amounts on
the subclass A-9 certificates plus (b) the interest, minimum principal
payments and principal adjustment amounts assumed to be payable on each
other subclass of class A certificates currently outstanding.
(6) "Expected Final Payment Date" with respect to the subclass A-9 certificates
means the date by which all the principal on the subclass A-9 certificates
will be paid based on the Base Case
Use of Proceeds The net cash proceeds from this offering of $750 million
will be used to refinance the existing subclass A-4 and
A-7 certificates.
Existing Certificates
Outstanding Ratings Annual Interest
Class or Subclass of Principal Amount (Moody's/S&P/ Rate (payable Assumed Final Final
Certificates and Notes (as of 15-Feb-01) Fitch) monthly) Payment Date (1) Maturity Date
---------------------- ----------------- ------ -------- ---------------- -------------
($ millions)
Subclass A-4 200.0 Aa2/AA/AA LIBOR+0.620% Mar 15, 2001 Mar 15, 2019
Subclass A-6 450.4 Aa2/AA/AA LIBOR+0.340% Jan 15, 2004 Mar 15, 2019
Subclass A-7 550.0 Aa2/AA/AA LIBOR+0.260% Mar 15, 2001 Mar 15, 2019
Subclass A-8 700.0 Aa2/AA/AA LIBOR+0.375% Mar 15, 2003 Mar 15, 2019
Class B 279.4 A2/A/A LIBOR+0.750% Dec 15, 2016 Mar 15, 2019
Class C 349.8 Baa2/BBB/BBB 8.150% Nov 15, 2013 Mar 15, 2019
Class D 395.1 Ba2/BB/BB 10.875% Dec 15, 2016 Mar 15, 2019
Class E (notes only) (2) 591.2 -- 20.000% (3) -- Mar 15, 2019
(1) Assumed Final Payment Dates were determined based on the assumptions
described under "Airplanes Group Performance Assumptions" in the
preliminary Offering Memorandum
(2) Held by General Electric Capital Corporation
(3) The annual interest rate on the class E notes is adjusted by reference to
changes in the U.S. Consumer Price Index since March 28, 1996. As of
February 15, 2001, the annual interest rate on the class E notes was
22.24%. Except for the class E minimum interest amount and supplemental
interest amount, payable at 1% and 10% per annum, respectively, no
principal or interest is payable on the class E notes until the more senior
classes of notes have been paid in full
2
Aircraft Summary
Original Transaction 1998 Refinancing 2001 Refinancing
March 1996 (1) March 1998 (2) January 31, 2001 (3)
-------------- -------------- --------------------
Number of Aircraft 229 218 193
Narrowbody Models (% of Appraised Value)
A320-200 8.82 9.67 10.41
B727-200A 0.24 0.21 0.23
B737-200A 4.34 4.46 3.37
B737-200C 0.42 0.44 --
B737-300 5.92 6.41 6.21
B737-400 13.90 15.41 16.82
B737-500 5.85 6.14 6.97
B757-200 3.07 3.32 3.53
DC9-14 0.05 0.05 --
DC9-15 0.15 0.14 --
DC9-32 0.86 0.78 0.71
DC9-51 0.50 0.49 0.43
F-100 7.37 6.77 6.15
MD-82 0.94 0.95 1.06
MD-83 12.36 12.99 13.82
MD-87 0.40 0.39 0.39
---- ---- ----
Subtotal 65.19 68.62 70.09
Widebody Models
A300-114-100 0.64 0.45 -
A300-134-200 0.79 0.65 0.57
A300-C4-203 0.45 0.42 0.47
B747-20OBC (4) 0.85 0.98 -
B767-200ER 1.32 1.38 1.37
B767-300ER 6.29 6.78 7.23
DC 10-30 1.00 -- -
MD-11 5.86 6.23 5.94
---- ---- ----
Subtotal 17.20 16.89 15.57
Freighter Models
B747-200SF -- -- 0.96
DC8-71 F 11.21 8.71 7.64
DC8-73CF 0.51 0.52 0.54
DC 10-30F 0.96 -- --
Subtotal 12.68 9.23 9.14
Turboprop Models
ATR42-300 0.65 0.65 0.68
DHC8-100 0.90 0.94 0.98
DHC8-300 3.26 3.55 3.45
METRO-III 0.12 0.12 0.09
---- ---- ----
Subtotal 4.93 5.26 5.20
(1) Using appraised values as of October 31, 1995 (aggregate value of $4,527
million)
(2) Using appraised values as of January 23, 1998 (aggregate value of $3,813
million)
(3) Using appraised values as of January 31, 2001 (aggregate value of $3,135
million)
(4) This aircraft completed its conversion to a freighter, B747-20OSF, on
March 27, 1998
3
AIRPLANES PASS THROUGH TRUST
I. Transaction Overview
(continued)
Lessee Summary
By Percent of Total Appraised Value (%)
----------------------------------------------------------------------------------
Original Transaction 1998 Refinancing 2001 Refinancing
March 1996 (1) March 1998 (2) January 31, 2001 (3)
-------------- ----------------- --------------------
Number of Lessees 83 74 66
Number of Countries 40 38 35
Europe (excluding CIS) 34.4% 33.6% 33.7%
Latin America 28.4% 33.7% 29.9%
North America 17.3% 17.2% 22.0%
Asia & Far East 15.0% 10.3% 10.0%
Africa 0.7% 1.5% 1.3%
Other (including CIS) 1.1% 0.5% 0.5%
Australia & New Zealand 0.3% 0.3% 0.3%
Off-lease 2.8% 2.9% 2.3%
Noise
Restrictions
By Percent of Total Appraised Value (%)
---------------------------------------------------------------------------------
Original Transaction 1998 Refinancing 2001 Refinancing
March 1996 (1) March 1998 (2) January 31, 2001 (3)
-------------- ----------------- --------------------
Stage 3 93.4% 93.4% 94.2%
Stage 3 Hush-kitted 0.0% 0.0% 0.8%
Stage 2 6.6% 6.6% 5.0%
- ----------
(1) Using appraised values as of October 31, 1995
(2) Using appraised values as of January 23, 1998
(3) Using appraised values as of January 31, 2001
4
Transaction Background On March 28, 1996, Airplanes Limited and
Airplanes U.S. Trust (together, "Airplanes
Group" or "APG") established pass through
trusts to offer and sell $4,048 million in
aggregate principal amount of subclass A-1,
A-2, A-3, A-4 and A-5 and class B, C and D pass
through certificates. The proceeds from this
offering, together with the proceeds from the
sale of the class E notes of Airplanes Group,
were used to acquire a portfolio of 229
aircraft from GPA Group plc (now known as debis
AirFinance Ireland plc) and its subsidiaries.
On March 16, 1998, APG established pass through
trusts to offer and sell $2,437 million in
aggregate principal amount of subclass A-6, A-7
and A-8 and class B certificates in connection
with the refinancing of the subclass A-1, A-2
and A-3 and existing class B certificates.
Assets As of January 31, 2001, APG's portfolio of
aircraft consisted of 193 aircraft
o 187 contracted leases with 66 lessees in 35
countries
o Liquidity reserve consisting of
- $80MM in maintenance reserve amount
- Cash security deposit reserve amount of
approximately $35.4MM
- $40MM in miscellaneous reserves
o Security deposits in the form of letters of
credit for $288.8MM
Please refer to the next page, Adjustment to
Liquidity Reserves, for more details
Of the six aircraft off-lease, three were
subject to lease agreements and one was subject
to a letter of intent as of January 31, 2001.
The remaining two unplaced aircraft represented
0.34% of our portfolio by appraised value as of
January 31, 2001.
5
Adjustment to Liquidity Reserves Subject to rating agency approval, as
of the closing date the miscellaneous reserve
amount is expected to be reduced to $nil and,
solely for purposes of the "First Collection
Account Top-Up" described in the Priority of
Payments on page 14, the maintenance reserve
amount is expected to be reduced to $60
million. The reduction of the miscellaneous
reserve amount would result in the payment of
the outstanding class A principal adjustment
amount ($38.6 million as of February 15, 2001)
and any remaining amount would be applied
towards reduction of the deferred scheduled
principal payment on the class C notes. The
reduction of the maintenance reserve amount
would allow an additional amount of up to $20
million to be applied to minimum hedge
payments, class A minimum principal, class B
interest, class B minimum principal and class C
and D interest, but would require that amount
to be retained in the Collection Account prior
to payment of class A principal adjustment
amount or any other amounts ranking junior to
the "Second Collection Account Top-Up" under
the Priority of Payments.
Appraised Value At January 31, 2001, the average of the three
appraised values from Airclaims Limited,
Aircraft Information Systems, Inc. and BK
Associates, Inc., for the remaining 193
aircraft in the portfolio was $3,135.4 million
(the "Appraised Value").
Aircraft Summary o At January 31, 2001, APG's portfolio of
aircraft consisted of 28 (% by Appraised
Value) different aircraft types
o Major aircraft types as a percentage of total
appraised value are as follows:
- 16.8% Boeing 737-400
- 13.8% McDonnell Douglas MD-83
- 10.4% Airbus A320-200
- 7.0% Boeing 737-500
- 6.2% Boeing 737-300/-300QC
- 3.5% Boeing 757-200
6
Lessees
(% by Appraised Value) As of January 31, 2001, APG had:
o 66 lessees in 35 countries
o Largest lessee, Air Canada, represented 9.0%
of the portfolio
o Largest country, U.S., represented 13.1% of
the portfolio
o Average remaining contracted lease term was
29 months
o All existing leases are denominated in U.S.
dollars
7
Servicer GE Capital Aviation Services, Limited ("GECAS")
is the servicer for APG's portfolio. GECAS is
headquartered in Shannon, Ireland where it had
97 employees as of January 31, 2001. GE Capital
Aviation Services, Inc., of which GECAS is a
subsidiary, has a further 130 employees
worldwide and has operations in Stamford,
Connecticut; Shannon, Ireland; Miami, Florida
and a number of other locations.
GECAS is a global commercial aviation financial
services company that offers a range of
aircraft financial products and provides
management, marketing and technical support
services to airlines, aircraft owners, lenders
and investors as well as various of its
affiliates and other third parties, including
the GE Group, Aircraft Finance Trust, debis
AirFinance Ireland and Airplanes Group. As of
January 31, 2001, GECAS and its affiliates
managed a portfolio consisting of 1,071
aircraft on lease to more than 161 lessees in
62 countries throughout the world. As of
January 31, 2001, GECAS had also committed to
purchase a total of 417 new aircraft from
manufacturers, deliverable through December
2007. On November 20, 1998, GECAS' affiliate,
GE Capital, acquired the class E notes
previously held by GPA Group (now known as
debis AirFinance Ireland) and its subsidiaries.
GECAS holds 5% of the ordinary share capital of
Airplanes Holdings, and GE Capital has an
option to acquire the residual interest in
Airplanes U.S. Trust from AerFi, Inc.
The servicer does not assume any liability or
accountability for (i) the terms and conditions
of the Certificates, (ii) the ability of
Airplanes Group to comply with the terms and
conditions of the Certificates or the
Guarantees and (iii) the structuring or
implementation of any aspect of the various
transactions contemplated by this Preliminary
Term Sheet.
The duties and obligations of the servicer are
limited to those expressly set forth in the
Servicing Agreement and the servicer does not
have any fiduciary or other implied duties or
obligation to Airplanes Group or any other
person, including any certificateholder.
8
AIRPLANES PASS THROUGH TRUST
I. Transaction Overview
(continued)
Ownership Structure
Airplanes/REFI Mar O1/Marketing/Term Sheet/Term_sheet_diagrams.ppt
------------
|Charitable|
| Trusts |
| (Jersey) |
------------
option to | 100% equity interest
purchase residual |
interest in v
----------------- Airplanes Trust ---------------- --------------------
| AerFi, Inc. Inc.| |GE Capital (1)| |Airplanes Limited |
| (Delaware) |-----------------> | (New York) | | (Jersey) |
----------------- --------------- --------------------
| residual | 100% indirect | 95% equity interest
| interest | equity interest |
| | |
v v v
---------------------- ----------- ---------------------
|Airplanes U.S. Trust| |GECAS (1)| 5% equity interest | Airplanes Holdings |------------------
| (Delaware) | |(Ireland)|---------------------- > | (Ireland) | |
---------------------- ----------- --------------------- |
| 100% equity | |
| interest v 100% equity interest |
v ----------------------- |
---------------- |Aircraft-owning | |
|AeroUSA | | aircraft | | aircraft
|and subsidiary| | and aircraft-leasing| | ownership
---------------- | companies | |
| ----------------------- |
| aircraft | aircraft ownership |
| ownership | |
v v |
--------------- ---------------- |
| 16 aircraft | | 177 aircraft | < ---------------------
--------------- ----------------
(1) The Certificates are not obligations of, or guaranteed by, or offered for
sale by GE Capital, GECAS or any of their affiliates
9
AiRPLANES PASS THROUGH TRUST
II. Structural Summary
Issuer Airplanes Pass Through Trust, a New York trust,
established in March 1996
Offering o Rule 144A and Regulation S, with registration
rights
o Failure to register the subclass A-9
Certificates on or before December 17, 2001
will result in a 0.50% increase in their
coupons
Underwriters Lead Manager and Sole Book-Runner: Morgan Stanley Dean Witter
Co-Lead Manager: Lehman Brothers
Expected Pricing Date On or about March 6, 2001
Expected Settlement March 15, 2001 Same-day funds through DTC,
Clearstream and Euroclear
Payment Dates The 15th of every month, beginning April 17,
2001
Day Count Basis Actual/360
Redemption Provisions o Premium redemption rates for early
redemptions and refinancings
o Redemptions from available collections to be
made without premium
Redemption of the
Subclass A-9 Certificates Redemption Date Redemption Premium
--------------- ------------------
After March 15, 2001................. 101.00%
On or after March 15, 2002........... 100.50%
On or after March 15, 2003........... 100.00%
10
Exchange Offer and
RegistrationRequirement If the subclass A-9 certificates are not
registered and exchanged through an exchange
offer on or before December 17, 2001, the
interest rate on the subclass A-9 certificates
will increase by 0.50% per annum until such an
exchange offer is completed or registration
statement is declared effective by the SEC.
Legal Maturity Date March 15, 2019
Minimum Denominations The subclass A-9 Certificates will be issued in
denominations of US$100,000 and integral
multiples of US$1,000 in excess thereof. The
subclass A-9 Certificates will be subject to
certain restrictions on transfer until the
exchange offer therefor is consummated.
ERISA Eligibility The subclass A-9 Certificates may be eligible
for purchase by an employee benefit plan or
other plan subject to Title 1 of ERISA or
Section 4975 of the United States Internal
Revenue Code of 1986, as amended.
Listing Luxembourg Stock Exchange
11
Leases Most of the leases are operating leases under
which APG generally retains the benefit and
bears the risk of the residual value of the
aircraft at the end of the lease.
The lessees are obliged to make rental payments
and generally assume responsibility for:
o ensuring proper operation and maintenance of
the aircraft
o providing indemnification and insurance for
losses resulting from operation of the
aircraft
o paying all costs of operating and maintaining
the aircraft and keeping the aircraft free of
liens
o complying with all governmental licensing and
other requirements
o grossing up payments where payments are
subject to withholding or other taxes
12
AIRPLANES PASS THROUGH TRUST
II. Structural Summary
(continued)
Annual Lease Remarketing Tasks
No. of Leases Rolling Off As % of Appraised Value
(As of 31-Jan-01)
(GRAPHIC OMITTED)
# of Leases
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
Turboprop 11 13 3 - 1
Freighter 2 8 6 3 -
Widebody 2 3 2 1 1
Narrowbody 22 33 33 17 9
---- ---- ---- ---- ----
Total 37 57 44 21 11
Inserted on 2/14/01 from CMSDOCS/204674 Copy and paste as paste special, as a
picture, not floating, but either directly into text or into a table cell.
13
AIRPLANES PASS THROUGH TRUST
II. Structural Summary
(continued)
Priority of Payments
CMSDOCS/ 204494
Collections
|
v
(1) Required Expense ------->(2) Class A Interest --->(12) Class C
Amount / and Swap Payments | Scheduled Principal
/ | |
/ | v
(3) First Collection / | (13) Class D ------------>(14) Modification
Account Top-up <----- | Scheduled Principal / Payments
| | /
| | /
v | /
(4) Minimum Hedge ---------->(5) Class A Minimum | (15) Class A Note<--------- (16) Class E
Payment Principal | Step-up Interest ---------->Minimum Interest
| | |
| | |
v | v
(6) Class B Interest | (18) Class B <------------ (17) Supplemental
| | Supplemental Principal Hedge Payment
| | |
| | |
v | v
(7) Class B Minimum | (19) Class A
| | Supplemental Principal
| | |
| | |
v | v
(8) Class C Interest | (20)Class D
| | Outstanding Principal
| | |
| | |
v | v
(9) Class D Interest | (21) Class C ----------> (22) Class E
/ | Outstanding Principal Supplemental Interest
/ | | /
/ | | /
/ | v /
(10) Second Collection<--- (11) Class A Principal | (23) Class B <-----------
Account Top-up -------> - Adjustment Amount --| Outstanding Principal
|
|
v
(24) Class A (25) Subordinated
Outstanding Principal-----> Swap Payments
|
|
v
(26) Class E
Accrued Unpaid
Interest
|
|
v
(27) Class E
Outstanding
Principal
14
Declining Balances of the Certificates under the Base Case (SMM)
- --------------------------------------------------------------------------------
AIRPLANES PASS THROUGH TRUST
III. Assumptions
Base Case Assumptions
Under the base case assumptions, the chart below summarizes monthly cash amounts
available to service the certificates.
% of Lease
Cash Flows Rentals Airplanes Group Assumptions
---------- ------- ---------------------------
Lease Rentals 100.0% o Lease rental rollout assumption has changed from original
transaction and 1998 Refinancing base case (detail next page)
o Sale at the end of useful life for 12% of assumed value when new (1)
Less: Net Stress-Related Costs (6.0%) o 6.0% of lease rentals assumed lost due to aircraft downtime, bad
debts, and aircraft repossession costs, offset by security deposits
drawn after an event of default and any other lease income which
includes lease termination payments and default interest
Plus: Interest Earned + 2.0% o One month LIBOR on all cash balances
Plus: Net Maintenance + 0.0% o Maintenance receipts assumed to equal maintenance expenses
Less: Aircraft Operating Expenses (5.0%) o 5.0% per annum of lease rentals
SG&A (8.0%)(2) o SG&A expenses represent the sum of
- Servicer fees payable to GECAS and administrative fees payable
to the administrative agent, both of which contain a portion which
will decrease proportionately with the number of aircraft
remaining in the portfolio after APG's portfolio has been reduced
to 153 aircraft
- Cash manager fees
- Other SG&A and other expenses
Equals: Cash Available to 83.0% o 83.0% of lease rentals available to pay interest and principal on
Certificateholders the notes and certificates
- ----------------
(1) Except for 3 B737-200As leased to Air Canada under finance leases which, in
line with the terms of such finance leases, are assumed to have a residual
value of $1 million each at the expiry of current lease
(2) As percentage of Assumed First Year's Lease Rentals
15
Assumptions
Original Transaction
and 1998 Refinancing 2001 Refinancing
-------------------- ----------------
Annual decline in lease rate: Age of Aircraft (in years, % per annum):
1-5................................................. 0.0 2.0
6-15................................................ 0.0 1.0
16-20............................................... 6.0 3.0
Thereafter.......................................... 6.0 5.0
Sale Value at End of Useful Life.................... 0.0% 12.0% (1)
Useful Life (yrs) for Passenger Aircraft............ 20.0-25.0 22.5-25.0
Useful Life (yrs) for Freighters (2)................ 20.0 20.0
Stress Costs........................................ (6.0%) (6.0%)
Maintenance......................................... 0.0% 0.0%
Interest Earned..................................... +2.0% +2.0%
Aircraft Operating Expenses......................... (2.0%) (5.0%)
SG&A................................................ (7.5%) (8.0%)
------ ------
Net Cash to Certificateholders + 86.5% + 83.0%
(1) Except for 3 B737-200As leased to Air Canada under finance leases which, in
line with the terms of such finance leases, are assumed to have a residual
value of $1 million each at the expiry of current lease
(2) Years from the date of conversion to freighter service
16
AIRPLANES PASS THROUGH TRUST
III. Assumptions
(continued)
Useful Life Assumptions
Aircraft Expected Useful
Type Life (yrs.) (1)
------------------ ---------------
Passenger Jet Aircraft A300 25.0
A320-200 25.0
B727-200A 22.5
B737-200A 25.0
B737-300/400/500 25.0
B757-200 25.0
B767-200ER/300ER 25.0
DC9-32/51 22.5-25.0
F-100 25.0
MD-11 25.0
MD-82/3/7 25.0
Freighter Jet Aircraft (Z) B747-200SF 20.0
DC8-71F/73CF 20.0
Turboprops ATR42-300 22.5
DHC8-100/300/300C 22.5
METRO-111 22.5
(1) We assume that each aircraft has an expected useful life that corresponds
to its aircraft type as set forth in the table above or, if longer, the
number of years from the date of manufacture or conversion to freighter
service of the aircraft to the date of termination of the current lease of
the aircraft
(2) Expected Useful Life in years from the date of conversion to freighter
service
17
Base Case Results
Percent of Initial Outstanding Principal Balance of the Certificates under the
Base Case:
Aggregate Class A
Subclass Subclass Subclass Certificates, including
Payment Date Occurring in March A-6 A-8 A-9 Refinancing Certificates
- ------------------------------- --- --- --- ------------------------
2001 (Closing Date) 48% 100% 100% 74%
2002 31% 100% 100% 69%
2003 14% 0% 100% 63%
2004 0% 0% 96% 57%
2005 0% 0% 74% 50%
2006 0% 0% 50% 43%
2007 0% 0% 29% 37%
2008 0% 0% 11% 31%
2009 0% 0% 0% 26%
2010 0% 0% 0% 21%
2011 0% 0% 0% 16%
2012 0% 0% 0% 11%
2013 0% 0% 0% 8%
2014 0% 0% 0% 4%
2015 0% 0% 0% 2%
2016 0% 0% 0% 0%
2017 0% 0% 0% 0%
Weighted Average Life (yrs) 1.5 2.0 5.1 6.4
18
Declining Balances of the Certificates under the Base Case ($MM)
[GRAPHIC OMITTED]
[Graph showing declining balances of the certificates and the expected
portfolio value 2001-2017.]
19
- --------------------------------------------------------------------------------
AIRPLANES PASS THROUGH TRUST
IV. Stress Tests
1. Effect of Inability to Refinance Subclass A-8 Certificates
The table below is based on the assumptions, except that the assumption has been
made that no refinancing certificates are issued. If no refinancings occur, the
expected maturity (Exp) and weighted average life (Avg) of the subclass A-9
certificates would be as set forth below.
Expected Maturities and Weighted Average Lives of Certificates
Expected Maturity/Weighted Average Life
-------------------------------------------------------------
Base Case No Refinancings
-------------------------------------------------------------
Exp Avg Exp Avg
--- --- --- ---
Subclass A-9 7.7 5.1 15.8 10.5
2. Minimum Revenue Percentage Required to Repay Certificates
The following tables show the minimum percentage of lease rentals that will be
necessary to repay all interest and principal on the class A certificates by
their final maturity date. If APG received actual revenues below the percentages
of lease rentals indicated below and all of the other assumptions proved to be
correct, APG would be unable to make the required payments on the notes and
certificates, which would constitute an event of default.
Percentage of Lease Rentals Necessary to Repay the
Certificates by the Final Maturity Date Assuming Actual
Experience Corresponds to the Base Case until the Beginning of the Year Stated
Closing Date Year 3 Year 6 Year 10
------------ ------ ------ -------
Class A 57.5% 54.5% 47.9% 36.0%
20
3. Effect of a Permanent Change in Lease Rentals
The tables below have been prepared based on the assumptions, except that the
revenue received by APG from lease rentals has been varied by the indicated
percentages, beginning in years 3 and 6. If APG received actual lease rentals as
indicated below and all of the other assumptions proved to be correct, then the
expected maturity and weighted average life of the subclass A-9 certificates
would be as set forth below.
Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates
Assuming a Permanent Change in Lease Rentals, Beginning in Year 3
Permanent Change in Lease Rentals as a Percentage of Lease Rentals
- --------------------------------------------------------------------------------
Exp Avg
--- ---
(Years)
Base Case + 10% 7.7 5.0
Base Case + 5% 7.7 5.0
Base Case 7.7 5.1
Base Case - 5% 8.3 5.6
Base Case - 10% 8.3 5.8
Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates
Assuming a Permanent Change in Lease Rentals, Beginning in Year 6
Permanent Change in Lease Rentals as a Percentage of Lease Rentals
- --------------------------------------------------------------------------------
Exp Avg
--- ---
(Years)
Base Case + 10% 7.7 5.1
Base Case + 5% 7.7 5.1
Base Case 7.7 5.1
Base Case - 5% 7.7 5.2
Base Case - 10% 8.2 5.3
21
4. Effect of a Permanent Decline in Portfolio Value
The following tables show the expected maturity and weighted average life of the
subclass A-9 certificates if the adjusted portfolio values permanently declined
to a given percentage of the expected portfolio value, beginning in years 1 and
5.
Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates
Assuming a Permanent Change in Portfolio Value, Beginning in Year 1
Adjusted Portfolio Value as a Percentage of
Expected Portfolio Value Beginning in Year 1
- --------------------------------------------------------------------------------
Exp Avg
--- ---
(Years)
110% 8.1 5.7
105% 7.9 5.4
Base Case (100%) 7.7 5.1
95% 7.3 5.1
90% 7.3 5.1
Expected Maturities and Weighted Average Lives of Subclass A-9 Certificates
Assuming a Permanent Change in Portfolio Value, Beginning in Year 5
Adjusted Portfolio Value as a Percentage of
Expected Portfolio Value Beginning in Year 5
- --------------------------------------------------------------------------------
Exp Avg
--- ---
(Years)
110% 8.1 5.5
105% 7.9 5.3
Base Case (100%) 7.7 5.1
95% 7.3 5.1
90% 7.3 5.1
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